NACA Targets Mortgage Investor as 'Predator'
The Neighborhood Assistance Corporation of America and its leader, Bruce Marks, are moving their controversial and confrontational model of consumer activism towards Wall Street, as the nation's housing crisis moves onward. This past Sunday, Marks and 350 to 400 fellow protesters were bused in by his non-profit group to stage a protest in front of the Greenwich, CT home of William Frey, manager of Greenwich Financial Services. That protest came after an earlier morning protest at the home of Morgan Stanley (MS) CEO John Mack in Rye, N.Y., by the same group. The protesters wore bright yellow hats and T-shirts with pictures of sharks and the words "Stop Loan Sharks," according to a story in the Stamford Times, which reported on the protests in conjunction with a press junket from NACA. Frey was targeted by NACA and its supporters after he sued Countrywide over its mass loan modification program in early December. In a complaint filed by the New York-based law firm of Grais & Ellsworth LLP, investors -- including Frey -- say the language in their contracts require the Calabasas, Calif.-based servicer to purchase all modified loans out of affected securitization trusts. Countrywide has said it does not believe it is required to do so. See earlier coverage. Countrywide first announced the loan modification program on Oct. 6, as part of a settlement with 15 different state Attorneys General that had sued the lender over predatory lending charges. Officials at Countrywide have insisted for months that their pooling and servicing agreements allow for loan modifications without repurchase obligations, when such modifications are done to prevent a borrower default. Only recently, however, have investor prospectus’ added language making that right explicit. The protests are part of a NACA-organized "Predators Tour," according to the Stamford Times. In Frey's case, the tour involved two buses and 52 vans' worth of protesters and equipment, including furniture that was placed all over Frey's property. "We did it to make them feel what it must be like for someone to have their home foreclosed upon," NACA mortgage counselor Carmen Orta told the newspaper. According to the Stamford Times, Marks says he is funded "through purchase loans that allow people to get homes with no down payment and a fixed rate mortgage of roughly 5 percent. These loans garner the organization $2500 each." But Marks' organization is also funded via Federal grant dollars funded by taxpayers, as well. A review of funds administered by the NeighborWorks America via the National Foreclosure Mitigation Counseling Program show that NACA received a $16 million grant, as a HUD-approved counseling intermediary, in early Dec. 2008 -- a grant larger than any award given to any state housing finance agency for homeowner counseling. "It's a war out there. We have tried other means, and peaceful means don't work," Marks told the newspaper. "It is personal. When homeowners are in danger of losing their homes, that is deeply personal to them. We need to bring the homeowner's families to the predator's families." Write to Paul Jackson at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.